Independent Contractors Injured on the Job in LA — Do They Have Rights?

In 2023, roughly 2.2 million California residents reported that they are primarily self-employed. This figure includes a combination of small business owners, freelancers, and gig workers, many of whom work long, hard hours in order to ensure their needs—and those of their loved ones—are consistently met.

With so many independent contractors fueling the economy in and around Los Angeles, it’s important to understand what legal protections are available to self-employed individuals in the event of an on-the-job accident. While traditional employees often rely on workers’ compensation or other benefits to bridge the gap after a workplace injury, independent contractors may feel more limited in their ability to recover compensation. Let’s take a look at some of the options available to independent contractors who are injured on the job and explore how California’s Assembly Bill 5 (“AB 5”) may impact workers’ compensation determination in the state.

Employees vs. independent contractors: What’s the difference?

In an increasingly gig-based economy, some people may find it hard to differentiate between employees and independent contractors. To put it very simply, an employee is someone who works directly for a company and is subsequently under that company’s control. In exchange for their subordination, employees are often granted benefits like health insurance, retirement savings plans, and workers’ compensation. The way employees are paid and pay taxes is also a significant qualifier, with employers typically withholding a portion of employees’ payroll taxes throughout the year to cover income tax, Social Security, and Medicare.

Independent contractors, on the other hand, are self-employed and offer their services to others on their own unique terms. Independent contractors are not technically under the control of a specific business entity. Rather, they agree to collaborate with other businesses for a pre-negotiated fee. Independent contractors are responsible for paying all of their own taxes and are typically paid in full by their clients at the time of service rather than having a portion of their income withheld for tax purposes.

What is AB 5?

California’s Assembly Bill 5, legislation clarifying the ways in which employers classify their employees, went into effect on January 1, 2020. AB 5 introduced a strict ABC test that can be used to assess whether a worker is actually an independent contractor or if they are technically operating as an employee.

Under this law, a California worker is considered an employee unless the hiring entity can prove:

1. The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
2. The worker performs work that is outside the usual course of the hiring entity’s business.
3. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

This test is intended to protect workers from unfair work arrangements wherein they retain all the standard responsibilities of a dedicated employee without enjoying the rights afforded to W-2 employees under the California Labor Code. If one or more of the above conditions aren’t met when evaluating the employment of an independent contractor, the presumed contractor will likely be re-classified as an employee and subsequently granted the full scope of workplace protections under the law.

What happens if a worker is misclassified?

In the past, California businesses could hire people as independent contractors in an effort to avoid providing them with employee benefits. As per AB 5, this structure is not appropriate or legal if an independent contractor is under the full control of their employer and performing functions typically associated with traditional employees.

When this type of misclassification is present, “independent contractors” may find themselves undersupported in the event of a workplace injury. With the new AB 5 test in place, however, misclassified workers may be entitled to workers’ compensation in the event of an accident, as long as they are classified as legal employees under the applicable test. If you think you have been erroneously classified as an independent contractor and want to know if you may be entitled to workers’ compensation benefits, an experienced workers’ comp attorney may be able to help you push back against illegal employment classifications and recover the benefits you deserve.

What about actual independent contractors?

Even with the new classification system in place, plenty of working professionals still legally qualify as independent contractors. Unfortunately, when these individuals suffer injuries on the job, their compensation options may be more limited than those of traditional employees. Nevertheless, independent contractors retain the right to file third-party claims in the event that their injuries were directly caused by another party’s negligence.

In practice, this might look like:

• A subcontractor is filing a claim against another company’s employee who behaved recklessly on a shared job site.
• A freelance photographer is filing a claim against a wedding venue for failing to resolve a known safety hazard.
• A rideshare driver is pursuing a car accident claim after being rear-ended by a negligent driver on the freeway.

In all of these scenarios, the independent contractors involved retain the ability to bring claims against the parties responsible for their injuries. The primary difference here, however, is that independent contractors in these situations cannot rely on workers’ compensation or other health-related benefits to help them bridge the gap during their recovery.

Damages available to independent contractors

If you experience a job-related injury while working as an independent contractor, the first thing you should do is consult with an experienced personal injury attorney to determine whether you may have been misclassified as a contractor in the first place. If it is determined that your employment meets the criteria for independent contractors set forth by AB 5, the next step will be to pursue an insurance claim or civil lawsuit against the party you believe to be responsible for your injuries.

If you decide to move forward with a traditional personal injury claim, you may be entitled to compensation for economic and non-economic damages, like:

• Medical expenses
• Lost income
• Long-term care costs
• Reduced capacity to work
• Pain and suffering
• Emotional distress
• Therapy costs

Because contractors don’t have the safety net of workers’ comp, these damages can play a pivotal role in a victim’s post-accident recovery process. This is yet another reason why it’s important to work with a reliable personal injury attorney who can help you pursue the maximum amount of damages available in your case.

Final thoughts

While genuine independent contractors in Los Angeles may not have the same workplace protections as employees when it comes to on-the-job accidents, there are still a number of avenues available to help injured contractors get justice. Whether you feel you may have been improperly classified as an independent contractor at the time of your injury or need comprehensive support while navigating a personal injury claim, an experienced personal injury and workers’ compensation attorney can help you fight for your rights.

McNicholas & McNicholas, LLP has built a reputation as one of California’s leading law firms by providing top-tier legal support to accident victims. We understand the unique challenges associated with helping independent contractors recover compensation following a workplace accident and are dedicated to fighting for injured workers to the fullest extent of the law.

If you’ve been injured in Los Angeles or the surrounding areas, don’t let another moment pass without having your needs met. Give us a call today or fill out our online contact form to schedule a free consultation with a member of the McNicholas & McNicholas team, and discover why so many Californians trust our firm to fight for their best interest after a workplace accident.